By J. Bruce Cochrane
The Scale Factor
In the future, we predict more and more agencies will move to agency aggregation of one variety or another, not only to gain access to a wider sphere of markets, but to leverage their collective strengths and scale to deliver a new spectrum of value to the insurance customer.
Scale enables efficiencies, which fuels the creation of new competitive advantages and feeds the value proposition, generating more sales, thus increasing even more scale and so on. In this ever revolving cycle of continuous improvement, the whole becomes greater than the sum of its parts.
Simply sharing markets and profit sharing won’t cut it. Successful aggregations will use scale and leverage to build long term sustainable value, enabling agencies to make the fundamental reinvention necessary for lasting success.
Challenges abound, but with them come opportunities. We can’t afford to just kick the can down the road because at our level, there are no bailouts. Those who take it for granted that the basic structure of risk and the role of independent agents and their carriers will always be as they have been will assuredly lose. Survival of the fittest has never been more relevant; however, in today’s dynamic world the fittest must also be the quickest.
We remain optimistic about the role and importance of the proactive agent’s future. We need to begin today to build toward the reinvention of our industry before circumstances or others force us down a path for which we are either unsuited or unprepared. Motivation can come from the half empty cup or the half full cup; from the drive to succeed, or from the fear of failure: Either one gets you to the same place. Rev up your engines and get on the highway to the future!